KSE-100 index surges 4.03%, gains over 4,400 points

KARACHI: After days of jaw-dropping declines, the stock market started the week with an unexpected recovery, marked by a 4.03 per cent surge in the KSE-100 index, closing at 113,924.42 points.

Karim Punjani, ex equities and treasury fund manager, said that the [market] was oversold, calling the surge a “quick and significant correction”.The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index gained 4,411.27 points to close at 113,924.42 points compared to 109,513.15 points in the previous session. During the day, the index touched a high of 114,189.72 points and a low of 110,891.36 points.

The KSE-30 index also posted significant gains, rising by 1,530.5 points or 4.43 per cent to close at 36,043.9 points.According to Shankar Talreja, director research at Topline Securities, the market recorded the second highest points-based gain in history primarily on the back of conversion to equities as returns on fixed income decline.

Market turnover increased, with traded shares in the ready market rising to 857.83 million from 754.91 million in the previous session. However, the trading value surged significantlyto Rs50.55 billion from Rs39.42 billion. Market capitalisation improved to Rs14.45 trillion from Rs13.96 trillion. Of the 463 companies active in the session, 361 closed in green, 62 in red and 40 remained unchanged.

Analysing the PSX’s performance, former adviser to the Minister of Finance Dr Khaqan Najeeb said: “the market recovered ... driven by a hope that the selling by mutual funds is now done.” He said that a “decline in fixed income yields have made equities increasingly attractive.”

On the political front, Monday brought some hopeful news. The Pakistan Tehreek-e-Insaf (PTI) and the government held their much-anticipated dialogue. According to a report by Geo.tv, the meeting, as per a press release, was held in a conducive environment and both sides agreed to hold further negotiations.

An analyst covering GCC markets, who spoke on the condition of anonymity, said that “although it is too early to price that in. I think politics did play a role in today’s rebound where both the government and the opposition sit together for the first time -- a move that signals some political certainty.”

Najeeb echoed these sentiments and added that the “decline in political temperature and the ongoing negotiations also gave hope and confidence to investors to invest in the market.”Adding more on the performance, Punjani added that “value hunting was witnessed” in the market.

Ali Najib, head of sales at Insight Securities, said “the buying pattern and market vibes suggested that mutual funds again are aggressive buyers, thanks to conversion from fixed income to equity funds and fresh flow they received on Friday and Monday.”He also highlighted the sectors driving the rally. “Fertiliser, [oil marketing companies] OMCs and E&P led the show [on Monday] with notable stocks such as OGDC, Eng ro, FFC, PSO and DAWH contributing significantly to the index’s movement, adding a combined 1,554 points positively,” he said.

WorldCall Telecom remained the volume leader with 71.05 million shares traded, closing at Rs1.72 per share, up 12 paisas. Cnergyico PK followed with 66.47 million shares, closing higher by 88 paisas at Rs6.79 per share. Pak Elektron saw a turnover of 38.65 million shares, closing at Rs40.73 per share, up Rs1.94.

Meanwhile, Reliance Cotton Spinning Mills and Rafhan Maize Products led the gainers’ list, with their share prices rising by Rs69 and Rs59.87, respectively. On the flip side, Unilever Pakistan Foods Limited recorded the sharpest decline, dropping by Rs299.8 to close at Rs21,100 per share.

In the futures market, 303 companies recorded trading, 280 of which increased and 23 decreased.In 2024, Pakistan’s stock market beat bonds, gold and the US dollar, largely due to economic reforms initiated by the IMF programme and a reduction in interest rates, which redirected local liquidity into equities, according to a report from Topline Securities released on Saturday.

Analysts see the market to continue its upward trajectory in CY2025 as well. In its recently released report, brokerage firm AKD Securities Limited projects the market to reach 165,215 by December 2025.